Subject: IOwa bill overview
From: [email-masked]
To: [email-masked]
Cc: [email-masked]
Date: Sun, 16 Apr 2000 15:05:00 -0700 (PDT)

Steve--you had asked for an overview of what is in the Iowa bill.  Below is a 
partial listing of what we like and don't like in it. 

Positives:

 choice as of October 1, 2002 for all customers

 strong codes of conduct (with penalties)

 metering and billing competitive

 large customers have SOS for one year only

 uniform unbundling  (muni and coops all post to a common web site)

 "shopping credit" increases each year that transition costs are collected

Negatives:

 divestiture is not required 

 stranded cost is thru lost revenue approach 

 SOS is in place for at least 6 years for residential/commercial (although 
IUB may bid out wholesale at some point)

 certification of suppliers is convoluted (we won't have trouble--it's just 
very prescriptive)

Description of Enviromental section:

The current bill provides for an RPS that ramps up to 8% in 2011.  
Additinally, monies are collected thru a non bypassable wires charge totaling 
approx. $50 million per year.  These monies are deposited with the Dept of 
Natural Resources, who is charged with designing programs that 
encourage/subsidize the development of renewable resources in Iowa.  If 
developers use this fund for their project, they must then offer renewable 
power to competitive energy suppliers for their 8% requirment at a "market 
rate".  A credit trading program is allowed. Competitive suppliers can meet 
their RPS requirment with sources from outside the state. If the DNR is not 
able to design subsidy programs that work, the IUB has the right to waive the 
RPS requirment for competitive electric suppliers.  As I described to you in 
our phone conversations, this agreement is as far as the customers would go 
in the renewable negotiations and this section has been agreed to by the 
governor.

The DNR and other enviromental groups continue to push for an amendment that 
de couples the RPS  from the DNR performance (makes the RPS hard, with no 
right to waive by IUB); that requires all renewables that are used by the 
competitors to Iowa based and that they have to be built after 2000. They 
also want significant financial penalties beyond the penalties already in the 
bill for certification infractions.  All of these proposals are deal breakers 
for the customers--who believe that competitors will not come to Iowa if 
there are too many hoops to jump thru (Illinois next door has no renewable 
requriments).

Conclusion

Since we have as one of our top tens goals for the government affairs group 
that we get 2 more states to pass legislation in 2000, I see this bill as a 
positive for us in trying to reach that goal.  As described in my previous 
updates, however, the bill is now ALL about politics, and passage rests with 
leadership.